Chinese Creative Drive: China Standards 2035

Standards permeate our everyday life. In an increasingly complex world, they shape products and economic activity and facilitate exchange, cooperation and international trade. Uniform norms and standards are the basic prerequisite for interoperability of products and processes, even beyond national borders. They ensure that the paper tray in the copier has the same standardized size as the paper it uses. They ensure that mobile phones from different providers can communicate with each other despite different technology. USB ports on computers, screw threads of light bulbs or the spelling of dates in German - all these things are standardized.

Self-developed and self-imposed constraints

Standardization processes and the creation of technical standards are characterized in Germany by two important aspects: Standards are not binding, but rather recommendations established by consensus, and in the current standardization landscape in Germany and Europe they are requirements developed by the industry itself and imposed on itself. Standardization work is – as the German Institute for Standardization puts it – a "self-administration task of industry". The state plays a subordinate role. This aspect should not be underestimated for the topic internationally and in connection with China's rapidly growing involvement in standardization work. Internationally, the standardization systems in Europe and the USA have been most influential in recent decades. The USA follows a somewhat different approach, but also emphasizes the leading role of industry. The strong focus on the technical aspects of standardization and the most efficient achievement of interoperability with voluntary commitment by industry has thus established a successful and effective system. This well-established system is currently being put to the test by developments in China, but also worldwide. The trade and technology conflict between China and the USA, China's efforts to implement its own standards within the framework of the Belt and Road Initiative, and the increased Chinese participation in the international standardization bodies ISO and IEC are the most visible examples internationally of the increasing strategic and political importance of a formerly technical topic for proven specialists. The circle of those who want to have a say in this is growing, and Europe's influence in standardization work is diminishing.

Standardization has a decisive influence on future industries

China's approach to standardization is much more focused on and dependent on the participation of state actors in the standardization process and the strategic use of standards. Industry is given much less leeway to participate, and the requirements for standardization activities are essentially determined by ministries and subordinate authorities. In 2018, China has announced a program called "China Standards 2035" with its details to be published at the end of 2020. Nevertheless, from the information known so far and the observations of foreign experts, conclusions can already be drawn about the general direction of this program. China Standards 2035 is in line with Made in China 2025 (MiC 2025). In a way, its "technical upgrade". The aim is to play a decisive role in affecting and shaping the setting of standards in those industries defined as central by MiC 2025. These include areas such as cyber security, autonomous and automated driving, the Industrial Internet and Industry 4.0, but also new energies. The much closer links between state and business in China, which have led the EU to describe China as a systemic rival, are also evident here. The state is at the center as a central actor, unfortunately not always sufficiently equipped with the necessary technical know-how but is more able to create national champions also in the field of standardization, for example through the control of large state-owned companies, and to expand its own influence in international bodies in this way.

Avoiding the development of a third standardization system

The political dimension described above will tend to increase in the coming years. From the point of view of the German economy, the following demands are paramount:

• The further development of a third system, in addition to the European and US-American standardization system, must be avoided. This would lead to unnecessary obstacles for companies and costs for all parties involved. Rather, international bodies should be used more to involve China more closely in standardization work. European stakeholders should emphasize the higher (technical) neutrality of the European approach on all occasions.
• We appeal to the Chinese government to involve foreign industry based in China at an early stage in the process of shaping the China Standards 2035 process and to ensure that new approaches in Chinese standardization lead to a level playing field in the competition between Chinese companies (both public and private) and foreign companies.
• In order to remove trade barriers and facilitate reciprocal market access, the provisions of the WTO/TBT Agreement should be consistently adhered to, i.e. international standards should be incorporated unmodified into the national body of standards and used for regulations determining market access. Adoptions with deviations should be made transparent, because regional or national requirements – be they due to special environmental conditions, social or cultural specialties or even existing regulations – can hinder the adoption and referencing of international standards.

German and European actors, companies as well as standardization bodies, must constantly be aware of the political dimension of this issue and the Chinese efforts and keep them in mind.